Relying on the main brand and 70% of revenue from Shandong, when will Qingdao Beer’s "1+1" brand strategy take effect?

Ask AI · How will the new management accelerate the premium branding process?

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On March 27, Qingdao Beer (600600.SH/0168.HK) released its 2025 annual report. Its revenue was RMB 32.473 billion, up 1.04%; its net profit attributable to shareholders of listed companies was RMB 4.588 billion, up 5.6%.

Behind the growth in both revenue and net profit is the pressure of slowing performance growth for Qingdao Beer. From 2022 to 2024, Qingdao Beer’s revenue growth rates were 6.65%, 5.49%, and -5.3%, respectively; the net profit growth rates attributable to shareholders of listed companies were 17.59%, 15.02%, and 1.81%, respectively.

With beer industry consumer demand weakening, how will Qingdao Beer maintain growth?

01

The main brand contributes 70% of revenue

Qingdao Beer adheres to the brand strategy of “Qingdao Beer as the main brand + Laoshan Beer as the national second brand.” In its financial report, Qingdao Beer stated that its Qingdao Beer products mainly focus on promoting and selling to the mid-to-high-end beer consumer market; other brand products represented by Laoshan Beer mainly target and push sales in the mass consumer market.

In 2025, the Qingdao brand achieved product sales of 4.49 million kiloliters, up 3.5%; other brands’ sales were 3.15 million kiloliters, down 1.36% year over year. In terms of revenue, the Qingdao brand’s revenue in 2025 was RMB 22.382 billion, up 1.35%; other brands’ revenue was RMB 9.448 billion, down 0.5% year over year. Their gross margin rates were 46.84% and 29.57%, respectively.

Based on this calculation, the Qingdao brand contributed 58.77% of sales volume, but its revenue share was 70.32%; other brands contributed 41.23% of sales volume, but their revenue share was only 29.68%.

Looking at a longer timeline, the growth rate of the Qingdao brand is higher than that of other brands. That is to say, the Qingdao brand has become the primary driver of Qingdao Beer’s growth. From 2022 to 2024, the Qingdao brand’s revenue was RMB 21.417 billion, RMB 23.263 billion, and RMB 22.083 billion, respectively, up 8.19%, 8.62%, and -5.07% year over year; the revenue of other brands was RMB 10.28 billion, RMB 10.143 billion, and RMB 9.495 billion, respectively, up 4.09%, -1.34%, and -6.38%.

At the same time, as the main force behind Qingdao Beer’s deployment in the mid-to-high-end market, the Qingdao brand’s slowdown in growth also, to a certain extent, affects Qingdao Beer’s performance in the mid-to-high-end market. However, Qingdao Beer has not disclosed the revenue of mid-to-high-end beers. It only mentioned that mid-to-high-end and above products achieved sales volume of 3.318 million kiloliters, up 5.2% year over year.

Meanwhile, the “treat yourself” consumption trend in the beer industry is becoming increasingly prominent. Consumer demand is shifting from simply meeting functional needs to seeking spiritual experiences and self-expression. While pursuing premiumization, health, personalization, and contextualization, consumers are also placing greater emphasis on matching both value-for-money and emotional value. Their pursuit of high-quality products continues to upgrade; they both favor practical choices with “good quality at a good price” and are willing to pay for products that fit their aesthetics and lifestyle.

In its financial report, Qingdao Beer said the company is accelerating the implementation of Qingdao Beer’s “1+1+1+2+N” product strategy, promoting brand optimization and product structure upgrades, and accelerating the cultivation of major single products and innovative categories. According to a research report by China Post Securities, “1+1+1” refers to classic + pure draft + white beer. It treats the classic series, pure draft, and white beer as the most core product combination for growth support, implementing full-region and full-channel combination operations to underpin volume and profitability. “2” refers to premium raw beer and crystal pure draft, fully leveraging the fresh-food segment and innovating operating models to build fresh-food star products. “N” includes products such as Auguste, Laoshan精品, and packaged-in-tin products.

In addition, Qingdao Beer also mentioned that it is advancing the cultivation of new categories and new tracks such as “whole-wheat, fine brewing, and 0-sugar light lagers, as well as alcohol-free or low-alcohol” by focusing on strategic, frontier areas such as “beer + biology + health.”

Evidently, Qingdao Beer is seeking new growth momentum through diversification.

Worth noting is that Qingdao Beer has also attempted to enter the yellow wine (Huangjiu) sector through acquisitions. In May 2025, Qingdao Beer announced that it plans to acquire 100% equity interest in Jimo Huangjiu, which is jointly held by XinhuaJin Group and LuJin Group, through a consideration of RMB 665 million.

Qingdao Beer stated that Jimo Huangjiu and the company both belong to the fermented liquor industry. With the addition of Jimo Huangjiu, it will further enrich the company’s product line, broaden market channels, and provide consumers with more diversified choices. Through synergy with the company’s existing advantages in brand and product promotion, sales networks, channels, and other areas, it will further expand market influence. In terms of seasonal cycles of market sales—during peak and off-peak seasons—“Jimo Old Wine” and the company’s beer products can create complementary effects for market sales, forming a cross-category product portfolio that is more competitive in the market. While consolidating the market position of the company’s traditional products, it will also open up new growth opportunities and inject new momentum into the company’s development.

In October 2025, Qingdao Beer released a progress announcement stating that, due to the failure to meet the delivery conditions precedent stipulated in the “Equity Transfer Agreement,” this equity acquisition transaction was terminated.

02

Still mainly focused on the Shandong market

In 2018, Qingdao Beer began to promote a layout of “one vertical plus two horizontals plus one ring,” emphasizing both consolidating key advantage markets and improving its penetration ability for premiumization in other regional markets. “One vertical” refers to revitalizing coastal markets. “Two horizontals” refers to the Yellow River strategy belt markets and the liberation of along-the-Yangtze markets. “One ring” refers to consolidating the market circle of the Greater Shandong base.

In its 2025 financial report, Qingdao Beer stated that refined operations in traditional advantage markets along the Yellow River further solidify its market leading position; market share and profitability continue to be steadily strengthened and improved, and the effect of contiguous development in the northern market becomes increasingly apparent. In the southern market, through positive accumulation, it continuously optimizes and enhances product structure, focuses on breakthroughs in specific regions and channels, and achieves quality-driven development. In overseas markets, it steadily advances the “one arc, three wings, and multiple points” market layout through product innovation, regional expansion, brand strengthening, model breakthroughs, and strategic upgrades, achieving for the first time that production is localized and distribution is local in the international market, and its brand international influence keeps increasing.

At present, nearly 70% of Qingdao Beer’s revenue still comes from its home base in Shandong. In 2025, Qingdao Beer’s revenue from Shandong was RMB 22.324 billion, up 1.04% year over year, accounting for 70.14% of beer revenue.

Meanwhile, during the same period, Qingdao Beer’s revenue from North China was RMB 7.864 billion, up 0.78%; revenue from South China was RMB 3.417 billion, up 1.18%; revenue from East China was RMB 2.592 billion, up 3.81%; revenue from Southeast China was RMB 0.668 billion, down 0.83% year over year; and revenue from Hong Kong, Macao, and other overseas regions was RMB 0.581 billion, up 6.84%.

From the perspective of gross margin, Shandong also recorded the highest gross margin. In 2025, the gross margins of Shandong, North China, South China, East China, Southeast China, and Hong Kong, Macao, and other overseas regions were 38.04%, 31.89%, 33.98%, 29.35%, 19.93%, and 32.88%, respectively.

From this, Qingdao Beer still needs to continue making breakthroughs in the southern market.

In this financial report, Qingdao Beer also introduced for the first time the “five-new” business—new products, new channels, new customer groups, new scenarios, and new demands. Qingdao Beer said the company will fully leverage the “five-new” business to open up new growth space. It will deepen emerging channels such as online and instant retail, promote refined operations in offline channels, expand high value-added consumption scenarios, and optimize the “fresh direct delivery” business layout. It will focus on building the “classic refresh + going mainstream outside the core” dual matrices, and concentrate on new customer groups such as Generation Z, women, and the elderly, achieving deep alignment among customer groups, products, and scenarios by constructing product functionality and brand scenarios.

With the build-out of new channels, whether Qingdao Beer can further deploy markets beyond Shandong is also worth looking forward to. But for now, dealers’ confidence in Qingdao Beer may have declined somewhat. In 2025, the cash flow generated from Qingdao Beer’s operating activities amounted to RMB 4.593 billion, down 10.91% year over year. It stated that this was mainly due to changes in advance receivables leading to a year-over-year decrease in cash received from sales of goods. Also, as of December 31, 2025, Qingdao Beer’s contract liabilities were RMB 7.674 billion, down 7.68% year over year.

03

Premiumization becomes competitive dividends

At present, the beer industry has entered a stage of competition with existing demand (a stock/volume-limited competition environment).

According to data from the National Bureau of Statistics, in 2025 China’s cumulative beer production by enterprises above a designated size was 35.36 million kiloliters, down 1.1% year over year, marking two consecutive years of decline.

The China Alcoholic Drinks Association said that in the first three quarters of 2025, beer companies above a designated size in China achieved both volume and price growth, and total profit increased significantly year over year in the same period. This reveals the core characteristics of the current beer market: total volume remains stable, but value is making a jump. The share of production and sales volume of the industry’s top five companies has already exceeded 84%, and their shares of revenue and profit continue to rise. This means that the industry’s growth dividend is increasingly flowing with certainty to leading companies that can successfully execute premiumization and efficiency improvement strategies.

From the industry perspective, beer leaders are all pushing premiumization. In 2025, in its financial report, Budweiser APAC stated that the premium and super-premium product mix accounted for more than two-thirds of its total revenue and contributed over 20% to revenue growth.

In 2025, China Resources Beer achieved beer sales of about 11.03 million kiloliters, up 1.4% year over year. Sales volume of beers of secondary premium and above grew in the mid-to-high single digits, accounting for nearly 25% of total volume, while sales volume of beers of general premium and above grew by nearly 10 percentage points year over year. Among them, Heineken recorded nearly 20% growth even with a high base; Lao Xue recorded 60% growth; and Red Jue doubled its sales compared with the same period last year.

Also as one of the top three beer companies in China, Qingdao Beer only mentioned in its financial report that sales volume of products such as Qingdao Beer’s Classic series, white beer, and super-premium series continued to reach new historical highs, with white beer’s sales growing rapidly to rank first in the industry’s white beer category. But given the overall slowdown in growth, its premiumization may face some obstacles.

Worth noting is that the China Alcoholic Drinks Association mentioned that to cross cycles and achieve sustainable growth, Chinese beer companies need to focus on three major strategic directions: first, operational efficiency. In a stock-competition market, reducing costs and increasing efficiency through digital transformation, supply chain integration, and expense optimization is the fundamental measure to improve profitability and resilience to risks. Second, innovation and diversification with a focus on synergy—product innovation should closely align with local and health-oriented trends. Third, a steady and gradual internationalization layout, since the internationalization of Chinese beer is still at an early stage.

And starting from the end of 2024, Qingdao Beer made changes to its management team. In December 2024, Huang Kexing stepped down as Chairman of Qingdao Beer, Executive Director, and Chairman of the Board’s Strategy and Investment Committee due to retirement. Jiang Zongxiang took over as Chairman and also served as President. He has extensive experience in corporate governance, strategic management, digital transformation, supply chain management, and production and operations in the beer industry.

In January 2026, Wang Yan was appointed as the company’s Vice President. He has extensive practical experience in human resources management and corporate operation management. In March, due to adjustments to internal job responsibilities, Cai Zhiwei resigned as Marketing President of the company; his position was taken over by Li Hui, the company’s Vice President, who has extensive experience in corporate strategic management, digital transformation, and marketing.

Based on the management team’s background, Qingdao Beer is accelerating changes in channels, marketing, and digitalization.

In 2025, although Qingdao Beer achieved both growth in revenue and profit, the trend of slowing growth rates has not changed. The effectiveness of the dual-brand strategy has diverged, and the regional markets still heavily rely on Shandong. Under this background, after completing management changes and proposing the “five-new” business, how Qingdao Beer can consolidate its advantage in key markets while advancing product structure optimization and a nationwide layout remains to be continuously observed.

Author丨Wuren

Source丨Zhengtan Finance (ID: teccj6)